Retention Strategies Take an Advanced Degree of Engineering

With growing numbers of high performers ready to leave their organizations, employers need to realize that those departures can be extremely costly for organizations in the resources it takes to recruit, hire and train new employees.

For decades, structural engineering firm Degenkolb Engineers had little trouble attracting top engineers. But in recent years, actually keeping those employees became a much bigger challenge, says Russell Kaltschmidt, director of people development for the San Francisco-based earthquake engineering company.

When Kaltschmidt came to Degenkolb in 2009, he was concerned by a turnover rate that had hovered around 10 percent for at least a decade, at times creeping up to 15 percent. Kaltschmidt joined the company’s executive team in making retention a priority by paying closer attention to managers’ work with coaching, training and engaging the staff.

Working with retention consultant Leigh Branham, founder and principal of the HR consulting firm Keeping the People Inc. in Overland Park, Kansas, Degenkolb gradually improved its annual turnover rate to about 5 percent today.

That kind of renewed focus on retention is critical in today’s economy, particularly in fields such as engineering and technology, as many HR experts say there’s clear evidence of an emerging war for top talent.

Tony DiRomualdo, vice president of research for the Institute of Corporate Productivity Inc., a Seattle-based workforce research firm, says its latest research on the qualities of high-performing organizations points to a greater focus on talent management, specifically better employee coaching and mentoring.

“We looked at over 300 companies and we found that coaching turns out to be the number one practice, the one with the strongest contribution to market performance,” DiRomualdo says.

At Degenkolb, one of the firm’s first big steps was hiring Kaltschmidt. Previously, human resources was a part-time role for the general counsel. Yet by having someone whose sole job was recruitment, retention and professional development, the 150-employee firm saw encouraging results in the job satisfaction and engagement of its workforce.

Branham says it’s important not to get complacent about employee engagement even at companies with piles of résumés. He recently released an updated edition of his book, The 7 Hidden Reasons Employees Leave, first published in 2005, which analyzes thousands of exit interviews and other research to determine why employees leave.

As many as 25 percent of “high performers” are ready to leave their organizations, according to some recent studies, and those departures can be extremely costly for organizations in the resources it takes to recruit, hire and train new employees, Branham says.

“What’s going to happen when the economy improves again to the point where the rate of job creation revs up, just as 75 million boomers start retiring in greater numbers, and the 45 million job-seeking Generation Xers are too few to fill the available jobs? As the scenario plays out, the War for Talent will rage again,” he wrote in his book, released in August 2012.

William Schiemann, CEO of the Somerville, New Jersey-based Metrus Group, adds that a company’s culture is a bigger factor in whether employees stay than many CEOs might think. Schiemann, co-author of the new book, Hidden Drivers of Success: Leveraging Employee Insights for Strategic Advantage, says that employees leave because of many factors besides bad bosses.

Schiemann says he encourages better collection and analysis of the reasons for departures, allowing emerging waves of departures to be quickly identified and addressed.

He argues that exit interviews alone can be poor indicators for why employees leave. Instead, he advises companies to create a “retention index” that gives early warning signs of units, roles and locations that are at high risk for employee turnover. Such an index can be created from a short list of survey questions, and then focus groups can help pinpoint how to address the concerns, Schiemann says.

He also encourages companies to talk with departing employees three to nine months after they leave because they’re rarely honest during an exit interview. Many of Schiemann’s clients are also creating alumni groups on LinkedIn, realizing that networking with alums can be a great way to build a bridge with former employees, who can also be a source of referrals for new hires and may even return to their former employer.

Those extra steps, he says, can be important to reverse turnover trends.

“From a retention standpoint, you’ve got to first focus on those employees who are really strategic to the mission and difficult to replace,” he says, “and then you’ve got to make sure you’re really working to keep them.”